Who will gain, and who will lose in the digital revolution?

By 2030, the digital revolution will push 75 million to 375 million workers around the world out of their current jobs. However, while many occupations will disappear from the employment landscape forever, many new professions will take their place. What skills will be in demand in the future?

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The changes we are witnessing today are being driven by the growing use of technology in everyday life. Artificial intelligence (AI) and self-learning machines are already altering the ways decisions are made and information communicated. The process is irreversible and accelerating. In the near future, chatbots will replace people in both B2C and B2B, while blockchain and cryptocurrencies will fundamentally change the world of finance. The Industrial Revolution 4.0 will bring far-reaching automation into manufacturing industries and the supply chains that feed them raw materials, components and even finished products. Services – initially those involving repetitive work – will become the domain of machines and software. Automatons and autonomous machines will replace people. All this will change the way we work, who we work for and how we are compensated. According to McKinsey Global Institute of the total displaced, 75 million to 375 million people may need to switch occupational categories and learn new skills, under our midpoint and earliest automation adoption scenarios; under our trendline adoption scenario, however, this number would be very small—less than 10 million. However, while many occupations will disappear from the employment landscape forever, many new professions will take their place. What skills will be in demand in the future? Which groups will gain, and which lose in the technological revolution?

The newdigital economy will affect a growing number of people negatively. Machines will learn to perform the same work they’re doing now, only faster, more cheaply, and without mistakes. At the same time, a substantial proportion of employees will benefit. Scores of professionals will become more valued in the labor market, and thus better rewarded. Who will they be? What unique skills will they possess and what will make them treasured in the digital economy? Market observations and McKinsey studies show that the most sought-after employees will be those in the following three categories:

1. Highly-skilled workers

With advances in voice recognition, imaging technologies, Internet of Things (IoT) sensors, and big-data-based support and decision-making, low-skilled jobs are going to be automated. The market will value other skills: abstract thinking and the ability to analyze large amounts of data, drawing conclusions on their basis. The question future job candidates will be asked most often by recruiters is: “Do you know how to work with smart machines?”

Today, many advanced skills are acquired outside of universities; they are developed with experience, as jobholders expand their knowledge of their businesses. But the knowledge gained today will become obsolete within three-to-five years. This is particularly true as AI penetrates ever more industries.

Today’s man-to-machine communication and data exchanges relies on interfaces created five decades ago (keyboards, screens), or at least three decades ago (mouses, trackballs). These interfaces are rapidly aging as virtual reality, augmented reality, voice control and communication are becoming part of our everyday lives. What’s next? Is the human brain going to be connected to a machine through a direct neurological link? Will data banks be planted inside our heads to add to our memory and accelerate our abilities? Will the future belong to human cyborgs who will become ideal and highly-skilled workers? Or, will tomorrow be populated by symbiotic creatures who are part human and part machine, with people contributing their intuitions, emotionality and unpredictability, and machines ensuring rapid data searching, data-set associations and instant analysis? It will take another 10-to-15 years to answer these questions, but only 10 to 15 years. That’s not so long.

2. Global super stars

Rapid data networking and collaboration tools, such as e-mail and video conferencing, have reduced the differences between geographical regions and time zones. At any time, anyone in an organization can work with data, conduct analyses or access knowledge that resides or was created anywhere on earth. A company searching for a programmer, designer or communications expert today is free to pick candidates from around the globe. I have no doubt that this process will become easier even as hiring full-time programmers, renting office space to accommodate them and fitting them out with hardware and furnishings will become increasingly less cost-effective. Instead, companies will recruit globally, hiring and remunerating the best programmers in the world. All companies need to do is to run a general cost-benefit analysis and tie the pay of such professionals to their performance and the lead times they can offer. A quick and simple calculation will show whether a project will make money once the fees such programmers request is paid.

This approach will produce a faster return on investment while allowing the programmers to serve more customers every year. The fact that such experts work remotely will become less difficult or burdensome to the organization. Improved job-sharing technologies will help workers communicate efficiently, share responsibilities and deliver desired outcomes. Increasingly, we will see “super star” specialists outperforming whole teams of less competent employees. As a result, employers will cut costs, improve efficiency and facilitate creativity. Creativity, in fact, is what I think is going to be the key advantage of humans over machines. Yet, it is not entirely clear how we will deal with the social consequences of this process.

3. High-impact owners

I define owners as those who hold capital and are empowered to invest in new technologies – technologies with the potential to advance the digital revolution. These include AI (including machine learning, cognitive computing and deep learning), blockchain (and cryptocurrencies), tools to enable sharing economies, autonomous machines… the Industrial Revolution 4.0. Access to capital will become a tremendous competitive advantage. Prominent economic theories suggest that once resources are divided between capital investment and the labor force (in this scenario, labor has been automated), investment will generate profit roughly proportional to the contribution made. Since digital technologies reduce demand for labor in many sectors, the ultimate return on the ownership of smart machines (which are cheaper than people) will rise.

In today’s economy, venture capital can finance companies such as Instagram, which was sold for billions of dollars when it employed barely 13 people, thereby keeping its human capital costs to an absolute minimum. Have so few workers ever created such huge financial benefits in the global economy? Now that such things are possible, the people with access to capital, who can invest it in new technologies, will benefit the most from the digital revolution.

Even so, high-impact owners will have new challenges due to a serious value-generator that has arrived on the global market: the flexible, informal and low-cost startup. Today, small companies, liberated from rigid management procedures and technologically empowered, are poised to compete successfully against the largest market players by creating innovative products and services. Big corporations are therefore attempting to establish symbiotic relationships with these emerging entities, in which the large company’s capital (which can facilitate development and scale) is supplemented by the fresh perspectives and creativity contributed by startups. Innovative ideas supported by big money are thriving more than at any time in the history of business. Several factors will affect the ongoing success of this process. In choosing investment opportunities, corporate executives will need to be bold and discerning. It may well be that one of the key professions of the future will be a market analyst whose job will be to distinguish between start-ups that will generate profit and those doomed to fail. On the other hand, small innovative business owners will face the dilemma of who to sell their business to and whether big capital will gobble them up or leave them enough leeway to make autonomous decisions.

Mergers today are a different animal. They bring together capital with intellectual value and, often, ideas that still need to be fully crystallized. To engage in such mergers, all participants in this process need to adopt new attitudes, be open-minded and educate themselves. That said, I am convinced this type of capital utilization, combined with the energy and creativity of startups, will drive the global economy in years to come.

Finding your place

I believe that the unprecedented global economic growth of the past six decades, and the tremendous rise of digital technologies will affect the way we live, learn, communicate and work. In my view, the three groups that will enjoy special advantages in the new digital economy are those capable of working creatively with intelligent machines, those who are the best at what they do (the stars in their professions) and those with access to capital.

If, dear reader, you can find a place among any of these groups, your future will be bright. If you cannot, you may have to work a lot harder than before and be more creative to maintain your current professional position. And, even then, your future status may be uncertain.

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By 2030, the digital revolution will push 75 million to 375 million workers around the world out of their current jobs. However, while many occupations will disappear from the employment landscape forever, many new professions will take their place. What skills will be in demand in the future?

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21 comments

Jack666

The dire predictions that robots are taking our jobs are overblown. Yes, work will be automated, but there will be enough jobs for everyone in most areas. I don’t expect automation will displace jobs involving managing people, social interactions or applying expertise. Gardeners, plumbers, child and elder-care workers are among those facing less risk from automation.

Mac McFisher

The work most at risk of automation includes physical jobs in predictable environments, such as operating machinery or preparing fast food. Data collection and processing is also in the crosshairs, with implications for mortgage origination, paralegals, accounts and back-office processing.

Adam T

Norbert Biedrzycki

McKinsey estimates 75 to 375 million people may need to switch occupational categories and learn new skills, under midpoint and earliest automation adoption scenarios but under our trendline adoption scenario, this number would be very small—less than 10 million.

Simon GEE

The most interesting ethical dilemmas specifically concern robotization. The questions are analogous to those asked with regard to autonomous vehicles. Today’s robots are only learning to walk, answer questions, hold a beverage bottle, open a fridge and run. Some are more natural than others at these tasks. Robots will not only replace us in many jobs. They can really be helpful, in e.g. taking care of the elderly, where constant daily assistance is required.

John Accural

SimonMcD

“In today’s economy, venture capital can finance companies such as Instagram, which was sold for billions of dollars when it employed barely 13 people, thereby keeping its human capital costs to an absolute minimum.” – great example. Liked it a lot

Tom299

Norbert Biedrzycki

ZoraBora

No one can tell what will or is likely to happen to our employment. When people say there are 3 million truckers in America and that autonomous trucks are a threat to their jobs, it may be generally true but not specifically true to any particular trucker. The same is true for lawyers, Wall Street traders, security guards, farmers, chefs and so on. These numbers are only estimates. Even McKinsey will not know for sure.

Norbert Biedrzycki

McKinsey estimates 75 to 375 million people may need to switch occupational categories and learn new skills, under midpoint and earliest automation adoption scenarios but under our trendline adoption scenario, this number would be very small—less than 10 million.

DCzaj

John Belido

“such as a coffee mug partly obscuring a vase in a photo, but robots mistake it for one unidentified object” This is an essential difference between humans and animals. A dog sees a man, a horse, and a man-on-a-horse. Three objects.

Adam Spikey

Physicist Stephen Hawking, Microsoft founder Bill Gates and SpaceX founder Elon Musk have expressed concerns about the possibility that AI could develop to the point that humans could not control it, with Hawking theorizing that this could “spell the end of the human race”.Stephen Hawking said in 2014 that “Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.” Hawking believes that in the coming decades, AI could offer “incalculable benefits and risks” such as “technology outsmarting financial markets, out-inventing human researchers, out-manipulating human leaders, and developing weapons we cannot even understand.” In January 2015, Nick Bostrom joined Stephen Hawking,Max Tegmark, Elon Musk, Lord Martin Rees, Jaan Tallinn, and numerous AI researchers, in signing the Future of Life Institute’s open letter speaking to the potential risks and benefits associated with artificial intelligence (Source: Wikipedia).

Adam T

John McLean

If a superhuman intelligence is a deliberate creation of human beings, theoretically its creators could have the foresight to take precautions in advance. In the case of a sudden “intelligence explosion”, effective precautions will be extremely difficult; not only would its creators have little ability to test their precautions on an intermediate intelligence, but the creators might not even have made any precautions at all, if the advent of the intelligence explosion catches them completely by surprise.

Karel Doomm2

Humans require a “wet,” organic, temperate, oxygen-laden environment while an AI might thrive essentially anywhere because their construction and energy needs would most likely be largely non-organic. With little or no competition for resources, conflict would perhaps be less likely no matter what sort of motivational architecture an artificial intelligence was given, especially provided with the superabundance of non-organic material resources in, for instance, the asteroid belt. This, however, does not negate the possibility of a disinterested or unsympathetic AI artificially decomposing all life on earth into mineral components for consumption or other purposes.